An option with a payoff that depends on the average price of the underlying asset during at least some portion of the life of the option is called an ______ option.
A) American
B) European
C) Asian
D) Australian

Question

Quizplus · Accepted Answer

An option with a payoff that depends on the average price of the underlying asset during at least some portion of the life of the option is called an Asian option. This is because it is based on the average price of the underlying asset over a certain period of time or a “moving average.” American and European options are based on the price of the underlying asset at a specific point in time, while there is no such thing as an "Australian" option.

An Option with a Payoff That Depends on the Average